Strength in upper echelon masking weakness for the masses?
Two recent articles point up the same theme. First, ZeroHedge post notes the stark disparity in Nat’l Ass’n of Realtors data on existing home sales. Lower priced homes are seeing outright declines in sales activity, while sales of homes over $1m are seeing strong growth. This table is from the NAR:
| Regional Sales by Price | ||||||
| Existing Single Family Homes | ||||||
| May 2014 | ||||||
| % Change in Sales from 1 Year Ago | ||||||
| Region | $0-100K | $100-250K | $250-500K | $500-750K | $750K-1M | $1M+ |
| Northeast | -4.4% | -7.5% | -8.5% | -7.5% | -4.9% | 1.5% |
| Midwest | -13.5% | -3.4% | -0.1% | 2.1% | -11.4% | -4.8% |
| South | -13.2% | -1.2% | 1.9% | -0.3% | 4.2% | 3.6% |
| West | -39.8% | -19.7% | -4.3% | 0.2% | -2.0% | 6.0% |
| U.S. | -14.5% | -6.6% | -2.5% | -1.7% | -1.7% | 4.0% |
Perhaps the lower price properties are more suitable for rental units, and buying by investment funds for that purpose has abated. Here’s the ZH link:
http://www.zerohedge.com/news/2014-06-23/something-disturbing-happening-california-housing-market
Second article was on Huffington Post. http://www.huffingtonpost.com/2014/06/20/darden-earnings_n_5515101.html
This post claims that Darden Restaurants’ results are evidence of the same theme, noting that middle of the road restaurants Olive Garden and Red Lobster are seeing declines in same store sales, while the high end chain Capital Grille has reported 4% same-store growth.
